Weak U.S. Housing Data; Stocks Sideways

123jump.com Staff
19 May, 2009
New York City

The U.S. stocks edged sideways in the early trading after the release of weak housing data. Invesco plans to raise $400 million in stock offering and Morgan Stanley sold its remaining stake in the MSCI Inc. Amex plans to cut 6% of its staff. Home builders edged lower after the housing data.

[R]10:30 AM New York – The U.S. stocks edged sideways in the early trading after the release of weak housing data. Invesco plans to raise $400 million in stock offering and Morgan Stanley sold its remaining stake in the MSCI Inc. American Express plans to cut 6% of its staff. Home builders edged lower after the housing data.[/R]

Stocks in the early trading edged lower after surging nearly 3% on the previous day. Weak housing data and more companies announcing secondary offering also dragged select stocks lower.

The interbank lending rate continues to fall as credit markets tensions ease and banks show greater willingness to lend to each other. The London Interbank offered Rate, Libor declined three basis points to 0.75% after surging as high as 4.82% in October 2008.

American Express said it will cut 6% staff to lower costs, Morgan Stanley completed sale of its stake in MSCI Inc and Invesco plans to raise $400 million.

Weakness Housing Starts Persists

The housing starts in April declined 12.8% from the revised March rate to 458,000 and 54.2% lower from a year ago revised rate of 1 million. The building permits in the month 3.3% lower from the revised March rate to 494,000 and 50.2% lower from a year ago rate of 991,000.

Housing completion in April increased 4.9% from the revised March rate to 874,000 but 15% lower from a year ago rate of 1.03 million.

Single family housing starts in April increased 2.8% from March rate to 368,000 and multi-family units in buildings with five units or more were 78,000.

Gainers & Losers

American Express ((AXP)) declined 2.3% to $25.53 after it reported to cut 4,000 staff as it battles rising customer defaults and falling consumer spending.

Invesco Ltd. ((IVZ)) dropped 9.2% to $14.15. The company plans to raise $400 million in capital to strengthen its balance sheet.

JA Solar Holdings ((JASO)) declined 8.4% to $2.97 after it reported quarterly loss and indicated that it will not meet its sales target for the year.

MSCI Inc ((MXB)) dropped 9% to $21.38 after the largest stock holder in the company Morgan Stanley sold its remaining stake in the index provider of 27.7 million shares at $21.50 a share.

Saks Inc. ((SKS)) surged 18% to $4.84 after it reported smaller than expected loss in the first quarter. Saks lost $5.1 million or 4 cents a share compared to net income of $17.3 million or 12 cents a share. Revenues declined 27% to $621.3 million from a quarter a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 251.60 or 2.78% to 9,290.29, Hang Seng index in Hong Kong increased 521.12 or 3.06% closed to 17,544.03, CSI 300 index in China higher 29.51 or 1.05% closed to 2,840.08. ASX 200 index in Australia increased 81.70 or 2.19 % closed to 3,817.30. The KL Composite index in Malaysia higher 11.48 or 1.13% closed to 1,023.49.

The Kospi Index in South Korea increased 41.53 or 2.99% to close at 1,428.21. SET index in Thailand closed higher 16.25 or 3.01% to 556.47 and JSE Index in Indonesia increased 82.45 or 4.57% closed to 1,886.02. The Sensex index in India increased 17.82 or 0.12% closed to 14,302.03.

Europe Markets Review

At mid-day trading the benchmark indexes in Europe are trading higher.

In London FTSE 100 Index traded higher 63.30 or 1.42% to 4,509.75, in Paris CAC 40 Index increased 46.98 or 1.45% to 3,292.37 and in Frankfurt DAX index traded higher 119.10 or 2.45% to 4,971.06.In Zurich trading SMI increased 80.30 or1.48% to 5,515.42.